Some reflections on my time in Japan while I am too busy to write

Today, I have several commitments in Tokyo and then a long flight so I decided not to try to finish Part 4 of my Q&A – Japan style series and will post the final part on Monday. For today, you will have to be content with some photos from the current trip to Japan and some comments. But who are those business-suited people in Tokyo wandering around in the mornings picking up garbage (see below)? Normal transmission resumes on Monday.

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Q&A Japan style – Part 3

This is the third part of a four-part series this week, where I provide some guidance on some key questions about Modern Monetary Theory (MMT) that various parties in Japan have raised with me. Today I am in Tokyo and doing a day of press interviews and some TV filming to promote MMT within the Japanese media. I had been very clear in press interviews already (yesterday) that I hope they they represent our ideas correctly to the people of Japan. For example, at yesterday’s press conference, after my lecture in the Japanese Diet (Parliament), I said that I didn’t want any of the many journalists present to leave the room and write that ‘MMT thinks that deficits do not matter’ or that ‘MMT was about governments printing money and spending it’. I hope the message gets through. As I noted in Parts 1 and 2, many people have asked me to provide answers to a series of questions about MMT, and, rather than address each person individually (given significant overlap) I think that answering them in some depth is the more efficient way to help them to better learn and understand the essentials of MMT and real world nuances that complicate those simple principles. These responses should not be considered definitive and more detail is available via the referenced blog posts that I provide links to. Today, the question is another one about the Green New Deal and the Job Guarantee with a diversion into basic income.

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Q&A Japan style – Part 2

This is the second part of a four-part series this week, where I provide some guidance on some key questions about Modern Monetary Theory (MMT) that various parties in Japan have raised with me. I have so far given two presentations in Kyoto and today I am in Tokyo addressing an audience at the Japanese Diet (Parliament) and doing some interviews with the leading media organisations in Japan. Many people have asked me to provide answers to a series of questions about MMT, and, rather than address each person individually (given significant overlap) I think this is the more efficient way to help them to better learn and understand the essentials of MMT and real world nuances that complicate those simple principles. In my presentations I will be addressing these matters. But I thought it would be productive to provide some written analysis so that everyone can advance their MMT understanding. These responses should not be considered definitive and more detail is available via the referenced blog posts that I provide links to. Today, the questions are about the Green New Deal and the Job Guarantee.

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Travelling all day today …

There will be no blog post today as I am travelling for the next 24 hours or so back from the US. It has been a very busy two weeks or so that has taken me to many cities and meetings with many different people. A lot of different agendas to absorb and think about. From West Africa to the struggles within the US, to the Eurozone and the chaos of Britain. But the commonality is a desire to understand MMT and apply it to better deal with the problems that face us and our planet. While I am flying I will not be attending to comments that need moderation. So it might be some time before you see your comment published (or not). I am now preparing for my next foray which will take me to Japan later this month.

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Brighton Labour Party Fringe Event with Chris Williamson – full audio coverage

I am travelling most of today and so no standard blog post. For a fair part of the day I also will not be able to moderate comments so there might be some delay. But thanks to the great work by Christian Reilly and Patricia Pino at the – MMT Podcast – my talk at the Brighton Labour Party Fringe Event with British Labour MP, Chris Williamson, was captured for all to hear. It means the event will survive the moment. To give context to the audio that the MMT Podcast has made available, I offer some commentary in this blog post. The comments and the audio should keep people busy until I am able to get back to normal writing. Now in New York City and looking forward to meeting the gang at the – MMT Conference – which runs this week.

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The ‘rats’ are deserting the mainstream ship – and everyone wants in

It is Wednesday today and only a short blog post. I am heading to New York city today from London. More on that tomorrow. It is clear now that journalists from all over the globe are starting to pick up on the shifts in policy thinking that I have been writing about – the admission by policy makers that monetary policy has reached the end of its effective life (not that it was ever particularly effective) and that there is a crying need for a return to fiscal dominance, which was the norm before the neoliberal era began several decades ago. We have not yet reached the stage where the dots are being fully joined – monetary policy dominance dead -> fiscal policy dominance desirable -> neoliberalism dead. But that will have to come because the fiscal policy activism will have to be aimed at addressing targets that have been neglected by the neoliberal era – real wages growth, quality and security of employment, restoration of public services, environmental care priorities, scope and quality of public infrastructure, and the like. But as the journalists are starting to file copy on this topic, some are very lazy – and just want to have it on the record that they were part of the throng. One of the laziest offerings I have read was published today in the Australian on-line newspaper, The New Daily (September 23, 2019) – The economic weapon too hot for the RBA to mention: Helicopter money – and written by finance journalist Michael Pascoe, who is usually more careful with his words. While many might think any publicity is good for the spread of our Modern Monetary Theory (MMT) work, my view is that falsely constructing MMT can add to the already stifling dissonance among the public that has been mislead for years by the framing and language of the mainstream economists.

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Is the British Labour Party aboard the fiscal dominance train – Part 2?

I am typing some of this on the train from Brighton back to London, after a day of speaking events in Brighton, where the British Labour Party conference is currently being held. I spoke at two events: (a) the GIMMS event on MMT and the Green New Deal and a video will be available soon; and (b) at an event alongside British Labour MP Chris Williamson, where were talked about how an Modern Monetary Theory (MMT) understanding can enhance the progressive policy cause and advance a transformation towards a ‘socialist’ (whatever that might be) state. It was great to see everyone at the events. The second event was attended by many people involved in the Labour Party itself and I hope that being exposed to new ideas will activate further grassroots resistance to the neoliberal system that undermines our material prosperity. So this two-part series is a reflection on the state of economic policy thinking within British Labour in the context of the paradigm shift that is going on now, around the world, in macroeconomic policy thinking. As I noted in – Part 1 – we are now seeing economists and policy makers, lining up, to tell us that a reliance on monetary policy has run its course and a new era of fiscal policy dominance is the only viable way ahead. That means that New Keynesian economics is over. That means that fiscal credibility rules that reflect an adherence to neoliberal constructs will need to be abandoned. And it seems that British Labour are lagging behind these major shifts that have been going on in economic policy thinking. Only Modern Monetary Theory (MMT) offers a consistent and credible path for Labour to make the shift into this era.

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Is the British Labour Party aboard the fiscal dominance train – Part 1?

As I type this (Sunday), I am heading to Brighton, England from Edinburgh. We had two sessions in Edinburgh yesterday (Saturday) and it was great to share ideas with some really committed people. We had to dodge a Hollywood closure of the streets (‘Fast and Furious 9 had commandeered the inner city to film a car or two swerving out of control or whatever, and I hope the city received heaps for the inconvenience to its citizens. But, with the direction now south, and tomorrow’s two events (more later), I am thinking the place of the British Labour Party in the progressive struggle. It doesn’t look good to me. The news overnight has been that the Party’s “head of policy and the author of the party’s last election manifesto” (quoting the Times today) has quit the Party claiming “I no longer have faith we will succeed”. The blame game starts and, as usual, Jeremy Corbyn’s leadership is in focus. The Times cartoon had the caption “They’ve got what it takes to form a government” with two ducks (in Brighton) looking at a sign against a wall saying “Labour Civil War Chaos”. What should we make of all this? My take is this: there is a clear paradigm shift going on in macroeconomic policy thinking. Every day (it seems) a new article pops up with someone claiming monetary policy has run its course and a new era of fiscal policy dominance is the only viable way ahead. That means that the central bank imprimatur on policy – determining whether such policy can continue to be effective and relying on interest rate adjustments etc as the primary counter-stabilisation policy – is over. That means that New Keynesian economics is over. That means that fiscal credibility rules that are neoliberal central are over. And that is why I think British Labour are looking poorly in the polls. They have taken advice from a number of characters who have pushed them into a ‘New Keynesian’ mindset and they are now ‘yesterday’s news’. They have missed the boat on these major shifts that have been going on. That is why they need a major shift in macroeconomic thinking. Only Modern Monetary Theory (MMT) offers a consistent and credible path for them to make that shift.

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Travelling all day today …

There will be no blog post today as I am travelling for the next 24 hours or so to Europe via LA. I have a detective novel to read – well 79 in fact, I have just started the complete Maigret series written by Belgian author Georges Simenon – so in the spirit of that great song from the Who – I hope I get finished with the series before I get old! And regular transmission will probably resume from Paris on Tuesday. While I am flying I will not be attending to comments that need moderation. So it might be some time before you see your comment published (or not). I hope to see many MMT people at one or more of the events where I will be speaking in the next two weeks – the details are overleaf.

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On visiting Japan and engaging with conservative politicians

It is my Wednesday blog post and my relative ‘blog day off’. But there has been an issue I want to write briefly about that has come up recently and has become a recurring theme. I am writing today to put the matter on the public record so that spurious claims that arise elsewhere have no traction. As our Modern Monetary Theory (MMT) work gains popularity, all manner of critics have started coming out of the woodwork. There is now, quite a diversity of these characters, reflecting both ends of the ideological spectrum and places in-between. The mainstream economists and those who profess to be ‘free marketeers’ bring out their big guns pretty quickly – inflation and socialism/Stalinism. Standard stuff that any progressive proposal to use government fiscal policy gets bombarded with since time immemorial. Easily dismissed. More recently, those who claim to be on the ‘progressive’ side of the debate have become more vociferous in their attacks, sensing, I suspect, that MMT have supplanted their relevance as the defenders of the anti-neoliberal wisdom. These characters resort to all sorts of snide-type attacks ranging from accusations of anti-Semitism (which I have covered previously), siding with Wall Street, ‘America-first corporatist sycophants’ (latest ridiculous book from G. Epstein as an example), giving succour to fascists and the Alt-Right, and that sort of stuff. Today, I want to address that last claim, which recently has been raised by a number of so-called progressive critics.

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The rich are getting richer in Australia while the rest of us mark time

Only a short blog post today – in terms of actual researched content. Plenty of announcements and news though, a cartoon, and some great music. I have been meaning to write about the household income and wealth data that the ABS released in July, which showed that real income and wealth growth over a significant period for low income families has been close to zero, while the top 20 per cent have enjoyed rather massive gains. These trends are unsustainable. A nation cannot continually be distributing income to the top earners who spend less overall while starving the lower income cohorts of income growth. A nation cannot also continually create wealth accumulation opportunities for the richest while the rest go backwards. These trends generate spending crises, asset bubbles and social instability. That is what is emerging in Australia at present.

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Apparently Brown could but Boris cannot – British progressive journalism at its worst

It is Wednesday and my blog post-lite day. A few topics – thugs in Britain. Mindless ‘progressive’ journalism trying to tell readers that while Gordon Brown could use fiscal policy tools (spending and taxation) to advantage to stimulate the British economy, Boris Johnson cannot. Piffle and the lies from the UK Guardian are getting more desperate by the week. And some notes on guns. Then a nice bit of guitar playing. Tomorrow, I will be extending my ideas on the Green New Deal.

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Seize the Means of Production of Currency – Part 1

Last week, Thomas Fazi and I had a response to a recent British attack on Modern Monetary Theory (MMT) published in The Tribune magazine (June 5, 2019) – For MMT. The article we were responding to – Against MMT – written by a former British Labour Party advisor, was not really about MMT at all, as you will see. Instead, it appeared to be an attempt to defend the Labour Party’s Fiscal Credibility Rule, that has been criticised for being a neoliberal concoction. Whenever, progressives use neoliberal frames, language or concepts, it turns out badly for them. In effect, there were two quite separate topics that needed to be discussed: (a) the misrepresentation of MMT; and (b) the issues pertaining to British Labour Party policy proposals. And, the Tribune only allowed 3,000 words, which made it difficult to cover the two topics in any depth. In this three-part series, you can read a longer version of our reply to the ‘Against MMT’ article, and, criticisms from the elements on the Left, generally, who think it is a smart tactic to talk like neoliberals and express fear of global capital markets. I split the parts up into more or less (but not quite) three equal chunks and will publish the remaining parts over the rest of this week.

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How social democratic parties erect the plank and then walk it – Part 2

In Part I, I considered an Australian-based attack on MMT from a Labour Party stooge. In this Part, I shift to Britain to address the recent article by a Northern Labour MP – Jonathan Reynolds – who is apparently, if his arrogance is to be believed, making himself the Labour Party spokesperson on matters economic. For the title of his recent article (June 4, 2019) was, afterall – Why Labour doesn’t support Modern Monetary Theory – which begs the question as to who actually doesn’t support MMT – all of Labour? Party? Politicians? Members? Who? I know of hundreds if not thousands of Labour Party members that are fully supportive of Modern Monetary Theory (MMT). So who is he talking about? The overriding issue that I introduced in Part 1 was that it is crazy for progressive politicians to use neoliberal frames, language and concepts when discussing their economic policy ambitions. Not only has the track record of the mainstream approach has been so poor but wallowing in these frames etc leads the so-called progressive side of politics to become trapped in the neoliberal tradition. The Reynolds article is no exception and if his view is widespread within British Labour then it will have a problematic future.

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Shorter hours might send us broke

It is Wednesday and just a short blog post today (short is relative I know). There was a proposal published recently (April 2019) by the British-based Autonomy Research Ltd – The Ecological Limits of Work. Autonomy pushed basic income and shorter working weeks with a healthy the ‘robots are coming’ agenda to boot. In its most recent ‘report’, Autonomy is claiming we have to dramatically cut working hours – like dramatically – but seems oblivious to the link between nominal and real. I think we will make more progress if we construct Green New Deal solutions within the current institutional realities. And, I just got my flame suit out of the cupboard where it sits on constant standby!

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US Congress hypocrites lose the plot

The way in which Modern Monetary Theory (MMT) has become politicised and misrepresented is quite something. The critics have all fallen into the same pattern. They rehearse a few statements that they claim represents what MMT is about, and, which they know will shock people who read and/or listen to them, into concluding that the proponents of MMT understandings are crazy. A whole host of wannabees are now jumping on the bandwagon. And last week, 5 Republican Senators in the US Congress tabled a bill which claims it is “the duty of the Senate to condemn Modern Monetary Theory and recognizing that the implementation of Modern Monetary Theory would lead to higher deficits and higher inflation”. For a start, these goons haven’t even cottoned on to the fact that one cannot implement Modern Monetary Theory (MMT) – they are surrounded by it, every day of their lives. But then if they had got that far, they would have also realised that the rest of their arguments in the draft legislation is equally ridiculous. We are making progress though – and the more they come out of the woodwork the better. So far not a blow has stuck.

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Marxists getting all tied up on MMT

Its Wednesday and so only a discursive type blog post (that is, very little actual research to report). I have been thinking about the so-called Marxist-inspired critiques of Modern Monetary Theory (MMT) and just the other day another one popped up in the form of the long article by Paul Mason. One of the things that I have noted about these critiques is that they deploy the same sort of attack against MMT that mainstream economics has traditionally deployed against Marxist economics. One would think they would at least be consistent. It won’t take me all that long to explain that.

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Ridiculous MMT critiques distorting Scottish independence debate

In a few weeks I am off to Britain again to participate in a series of events. Two of these events will be in Scotland where we (Warren and I) will discuss, as outsiders, issues pertaining to the monetary arrangements that might accompany a move to Scottish independence. It is a controversial issue in itself, but, unfortunately, is also intertwined with the vexed issue of EU membership. And the complication then becomes that progressives, who might otherwise be attracted to the Modern Monetary Theory (MMT) way of understanding the monetary system, also exhibit the standard misconstrued Europhile view that the EU, neoliberal though it is, can be reformed and that an independent Scotland should be part of that mess. And, in doing so, they then take problematic positions on the currency question. So a sort of ‘nest of vipers’ sort of situation, from the Aesop’s fable – The Farmer and the Viper. As in the Fable, the Europhiles embrace of the EU will always pay them back in grief. Anyway, while I am always cautious discussing the pro and con of situations where I have no direct material stake and a less than full understanding of specific cultural and historical influences that are at work, the Scottish question is interesting and demonstrates many of points that nations should be cogniscant of when discussing monetary sovereignty. And besides I have to get up in Edinburgh and Glasgow in a few weeks so as a researcher I am trained to be prepared and seek the best understanding that I can of the complexity of the situation. I will be writing a few posts on the Scottish issue as I prepare for that speaking tour.

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When the MMT critics jump the shark

I was sent two papers by Thomas Palley the other day. I have known him for decades. He continually disappoints. He has become one of those self-styled Post Keynesians who are trying to destroy the credibility of Modern Monetary Theory (MMT) for reasons that are not entirely clear although I know things I won’t write here. He thinks that if he drops a reference to Michał Kalecki, the Polish Marxist economist, into a paper, it qualifies one as being Post Keynesian. But, the reality is that his work (what limited academic work that he has published) sits squarely in the Neoclassical IS-LM synthesis tradition, which is not Post Keynesian nor heterodox at all. It is the antithesis of Post Keynesian. So I have never understood how he wants to appear Post Keynesian. Anyway whatever the answer to that little puzzle is, he definitely has a set on MMT and regularly recycles the same sorts of attacks, which, continue to have the same problems. In other words, he does not seem to (or does not want to) learn. He also accuses those who respond of dishonesty – playing the pure is me card – although his own work on MMT fails, in part, because he deliberately (or not) refuses to acknowledge the extant MMT literature, which addresses the issues he claims are missing in the MMT approach. Go figure!

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The effectiveness and primacy of fiscal policy – Part 2

This is the second part of a three-part series discussing the political issues that give me confidence in the primacy of fiscal policy over monetary policy. The series is designed to help readers see that the recent criticisms of Modern Monetary Theory (MMT) as being politically naive and unworkable in a real politic sense have all been addressed in the past. In Part 1, I gave examples of how ‘agile’ or ‘nimble’ fiscal policy can be when an elected government has it in their mind to use their spending and taxation capacities to change the direction of the non-government economic cycle. It is simply untrue that fiscal policy is inflexible and cannot make effective, well-designed policy interventions. In this second part, I will address aspects of how such interventions might be organised. Specifically, some people have advocated that MMT might replace the so-called ‘independent’ central bank, with an ‘independent’ fiscal authority, which they seem to think would take the ‘politics’ out of fiscal policy decision-making and focus it on advancing the well-being of the people. The intentions might be sound but the idea is the anathema of what progressives, interested in maintaining democratic accountability would propose. I consider such an independent fiscal authority would constitute the continuation of the neoliberal practice of depoliticisation and further increase the democratic deficit that is common in our nations these days. Politicians are elected to take responsibility and make decisions on our behalf. They should be always be held accountable for those decisions and not be allowed to defer responsibility to an external source (like an ‘independent’ central bank or an external fiscal authority).

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